NSW:Kelly acted corruptly over land deal: ICAC

Former NSW Labor minister Tony Kelly is facing criminal charges and party expulsion after an inquiry ruled he acted corruptly over a land deal in the dying days of the Keneally government.

The Independent Commission Against Corruption (ICAC) has found the former NSW lands minister engaged in corrupt conduct over a multimillion dollar property deal involving a former union-owned retreat in Sydney’s northern beaches.

In a report released on Monday, ICAC said Mr Kelly acted corruptly when he backdated a letter - signed on March 18 - that was used to claim authority to buy the Currawong Beach property just two weeks before the March election.

Mr Kelly signed the letter after the former chief executive of the Land and Property Management Authority (LPMA), Warwick Watkins, acted outside the limited authority granted to him by then Premier Kristina Keneally.

Mr Watkins was at the time facing an internal audit into the Currawong purchase, ordered by the Department of Premier and Cabinet, with the deal breaching caretaker guidelines in place during the election campaign.

ICAC recommended the Director of Public Prosecutions consider laying charges against Mr Kelly, Mr Watkins and LPMA’s former chief financial officer Robert Costello, for “various criminal offences" relating to the backdated letter.

However, it cleared all three of any wrongdoing over the $12.2 million Currawong deal.

Mr Kelly shocked colleagues in June by suddenly announcing his retirement from parliament, before ICAC announced it would hold hearings into the scandal.

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NSW Opposition Leader John Robertson immediately acted to have Mr Kelly expelled from the party, writing to NSW Labor General Secretary Sam Dastyari to request the former upper house MP’s membership be terminated.

“There is no place in the Labor Party under my leadership for anyone like that ... and I expect that the general secretary will terminate his membership," Mr Robertson said.

Disgraced former Labor minister Ian Macdonald had his membership suspended last week following another request from Mr Robertson, made in the wake of ICAC hearings into his involvement with property developer Ron Medich.

ICAC is investigating allegations that Medich arranged for Mr Macdonald - then the energy minister - to spend time with a prostitute as reward for setting up meetings with Country Energy and Energy Australia executives.

Mr Robertson said action against the two former ministers was part of “cleaning out the Labor Party".

“I’m not going to tolerate anybody in the Labor Party behaving in this manner," Mr Robertson said.

“If this happens again I will take this stance again and again.

“I’m not going to have these sorts of people in the Labor Party under my leadership."